European shares extended gains on Monday, taking their cues from a positive session in Asia, as investors eyed a European Central Bank policy meeting on Thursday.
The pan-European Stoxx 600 index rose 1.25% in early deals with all major regional bourses higher. US futures indicated a positive opening for all Wall St indices.
Shares in BP and Shell rose on the back of higher oil prices, which rebounded after a sharp drop last week amid fears of a global recession and softer demand.
“A weaker US dollar combined with risk-on sentiment which is lifting global equities are also supporting more bullish price action to start the week for oil with WTI and Brent crude straddling the psychological $100 a barrel level,” said Victoria Scholar, head of investment at Interactive Investor.
Investors are also expecting a 25 basis point rise in rates when the ECB meets later in the week.
In equity news, UK motor insurer Direct Line plunged 12% as the company lowered its profit outlook, citing a volatile market.
The company revised its combined operating ratio target range to 96% to 98% from a previous 93% to 95% outlined in May. A ratio closer to 100% indicates reduced profitability.
Sector peer Admiral also fell on the news, Both stocks were also downgraded by Jefferies.
Haleon shares made their debut on the London Stock Exchange as a result of its demerger from GlaxoSmithKline, with investors receiving one Haleon share per one share of the parent company. The stock was down around 5%, while GSK plummeted 19%.
The newly-formed company was the result of a merger of the consumer health divisions of GSK, Pfizer and Novartis which boasts a portfolio including Panadol and Sensodyne.
